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Copper rises on trade optimism

A rebound in copper and other metals continued on Tuesday as investors weighed Monday’s agreement between the U.S. and Mexico to revise the North American Free Trade Agreement.

Copper for September delivery added 0.8% to $2.7290 (U.S.) a pound on the Comex division of the New York Mercantile Exchange. Prices were on track for their seventh gain in the past nine sessions, though they are still about 17% below June’s four-year high. Worries that trade disruptions will weaken the global economy and lower demand have hurt a wide range of materials.

But analysts said Monday’s news could be a sign that the Trump administration is willing to compromise with other countries, such as China, which consumes about half the world’s copper and is a prominent source of demand for other materials.

In that context, and in light of expectations for a U.S.-Mexico agreement, “we are of the opinion that [base metals price] dips should find buyers,” said Alastair Munro, a broker at Marex Spectron, in a note to clients.

Still, analysts are waiting to see how the U.S. trade fight with China unfolds, as the two sides have charted a path to resolve negotiations ahead of planned meetings in November.

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Lukewarm economic data from China has also worried some traders anticipating a slowdown in demand for metals widely used in construction and manufacturing.

Among precious metals, gold for December delivery also continued to rebound, adding 0.2% to $1,218.00 a troy ounce. Prices have bounced back almost 3% since hitting their lowest level since January 2017 earlier this month, though they are still down more than 7% for the year.

A weaker dollar has lifted metals lately by making them cheaper for overseas buyers. On Tuesday, the WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, fell for the 10th time in the past 11 sessions, sliding 0.2%. It hit a 15-month high earlier this month.

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